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LONDON - Copper prices crept lower on Tuesday, pressured by a firmer dollar amid uncertainty over a potential global recession and demand in top metals consumer China.
Three-month copper on the London Metal Exchange (LME) slipped 0.2% to $9,334.50 a tonne in official open-outcry trading, having surged 13% since Jan. 5.
"You could argue that it would be a good time to see some profit-taking," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.
"But the fact that it's not emerging means the market is keen on holding onto the longs and waiting for the next move, which will have to be confirmed by an actual pick-up in demand from China."
Volumes were thinner than usual because Chinese markets were closed for the Lunar New Year holiday.
Physical copper consumption has been weak in China, but investors are betting that the recent lifting of COVID-19 controls will boost activity and demand in coming months.
Investors were awaiting U.S. economic data for further direction on the Federal Reserve's interest rate trajectory, with U.S. flash PMI data due on Tuesday.
"It will be watched very carefully, given the confusing signals we're getting from recent U.S. data, where sentiment is weak and job reports are strong," Saxo Bank's Hansen said.
The dollar index was slightly firmer, indicating U.S. currency strength that makes dollar-priced commodities more expensive for buyers using other currencies.
LME nickel rose 1.4% to $28,500 a tonne after Russian metals producer Norilsk Nickel said it expects its nickel production to fall this year.
The benchmark LME spread for lead - the gap between cash metal and the three-month contract - moved to a discount of $6 a tonne from a premium of $63 nearly three weeks ago, indicating more plentiful near-term supplies.
In other metals, aluminium fell 0.4% to $2,626 a tonne and zinc shed 0.6% to $3,401 while tin was up 1.4% at $29,900 and lead added 0.5% to $2,066.
(Reporting by Eric Onstad Editing by David Goodman)